HEINY - Heineken stock rises sharply on strong revenue growth in Europe Americas

2023-04-19 12:24:58 ET

Heineken ( OTCQX:HEINY ) shares marked a solid gain on Wednesday as the Dutch brewery conglomerate reported strong revenue growth in key markets.

The Amsterdam-based company notched 9.2% revenue growth year over year, according to a first quarter trading update. Organic revenue grew 8.9% despite a 3% decline in beer volumes.

Positive revenue growth in the Americas and Europe was credited for offsetting more downbeat performance in Asia and Africa. Net sales in the Americas and Europe rose 14.8% and 13.5% year over year, respectively.

“We start the year with strong revenue growth driven by pricing and disciplined revenue management, while we materially increase investment behind our brands. Business performance in Europe and the Americas regions is encouraging, with consumer demand holding up better than expected in the first quarter,” Dolf van den Brink commented. “Results in the Asia Pacific and Africa, Middle East and Eastern Europe regions were disappointing, hindered by temporary volatility in Vietnam and Nigeria, leading to demand softness.”

Gross merchandise sales also aided the rise in revenue, per the financial disclosure. For the rest of the fiscal year, the business is unchanged. Operating profits are expected to grow organically in the mid-to-high-single-digit range. Despite an economic environment that is “volatile and uncertain.”

Elsewhere, the company updated its divestiture of Russian operations.

“We continue to make progress to transfer the ownership of our business in Russia and an application has been submitted for approval to the authorities in the Russian Federation in-line with local regulatory requirements,” the company said. “There is a limit to what we can say before this process is completed. If and when we have approval, we will share further details about the buyer and agreement.”

Shares of Heineken ( OTCQX:HEINY ) rose 3.53% in afternoon trading.

Read more on rumors of M&A activity for Heineken in North America .

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